Supply chain management software

Supply chain management software (SCMS) is the software tools or modules used in executing supply chain transactions, managing supplier relationships and controlling associated business processes.[1]

While functionality in such systems can often be broad – it commonly includes:

  1. Customer requirement processing
  2. Purchase order processing
  3. Inventory management
  4. Goods receipt and Warehouse management
  5. Supplier Management/Sourcing

A requirement of many SCMS often includes forecasting. Such tools often attempt to balance the disparity between supply and demand by improving business processes and using algorithms and consumption analysis to better plan future needs.[2] SCMS also often includes integration technology that allows organizations to trade electronically with supply chain partners.[3]

Shift to Cloud-Based (SaaS) Technology

SCMS adoption is growing faster than the broader enterprise application software market. The annual revenue from SCMS (both premise-based and SaaS) reached $10 billion in 2014, a 12 percent increase over 2013.[4]

While premise-based software was still more widely used than SaaS solutions for SCMS in 2014, Gartner projects that about two-thirds of the growth in SCMS adoption between 2015 and 2018 will be based on the SaaS subscription model: driven by a growing realization of the benefits of cloud-based services, the SaaS-based SCMS market grew by about 24 percent in 2014 and is projected to continue to grow at a 19 percent compound annual growth rate (CAGR), reaching $4.4 billion in annual sales by 2018.[5]

SaaS Benefits

With SaaS-based SCMS, companies can subscribe to the software for a monthly fee rather than having to invest in expensive software licenses, along with any associated hardware requirements. Moreover, SaaS offers faster setup times, faster returns to positive cash flows, the flexibility to change strategies, lower IT resource requirements, and an option to trial software before committing to a full subscription. SaaS is therefore typically more accessible for small- and medium-sized companies.

But its usefulness extends to large enterprises as well: Pfizer, faced with the challenge of managing its increasingly complex supply chain after over 25 company acquisitions, implemented a cloud-based platform to manage its supply chain.[6] Each of its 500 suppliers were represented by a separate node within the cloud-based SCMS platform, making it possible for Pfizer to trace all of its shipments in real time. Without the SaaS solution, the company would have required each of its suppliers to install physical infrastructure to track freight movements. With a SaaS SCMS platform, Pfizer can quickly and easily add or remove suppliers from the platform without installing or removing physical infrastructure at the suppliers’ facilities. This new traceability and visibility has allowed the company to expand to new markets.[6]

See also

References

  1. ↑ http://blog.procurify.com/2014/12/17/brief-history-modern-supply-chain-management-supply-chain-management-best-practices/
  2. ↑ Developing Quality Complex Database Systems: Practices, Techniques, and Technologies By Shirley A. Becker
  3. ↑ Strategic Supply Chain Alignment: Best Practice in Supply Chain Management By John L. Gattorna
  4. ↑ "Gartner Says Supply Chain Management Software Revenue Is on Course to Reach $10 Billion in 2014". www.gartner.com. Retrieved 2015-12-06.
  5. ↑ "Forecast: Public Cloud Services, Worldwide, 2012-2018, 2Q14 Update". www.gartner.com. Retrieved 2015-12-06.
  6. 1 2 "Supply chain management in the cloud" (PDF). Accenture. 2014. Retrieved September 5, 2015.
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